Panaya Deal Clean, Infy Victim of Malicious Rumours: Sikka
Infosys CEO blames current controversy on “maliciousness” of “Monday morning quarterbacks”, denies former CFO Bansal had raised red flags during Panaya deal
In any organisation you would have dissenting voices. It is a good thing. You have a process, you deal with that dissent R SESHASAYEE Chairman, Infosys
Mumbai: Infosys CEO Vishal Sikka denied any wrongdoing in Infosys’ $200-million acquisition of Panaya, and blamed the current controversy that the company is embroiled in on the “maliciousness” of “Monday morning quarterbacks”. “There is a lot of irresponsibility and maliciousness in what you see. You don’t appreciate that... the people who are feeding the wrong stories to the media,” said Sikka, at pains to point out that he wasn’t referring to the promoters of the company. “Lot of people, bystanders, the Monday morning quarterbacks. It is a price you pay for being at Infosys. I try to not let it get to me. Life is too short,” he said. In American slang, a Monday morning quarterback is a person who criticises the actions or decisions of others. Sikka denied that former CFO Rajiv Bansal had raised red flags during the Panaya acquisition. On Monday, ET reported that Bansal had expressed reservations about the Panaya deal, which led to him leaving the organisation with a severance package of .₹ 17.38 crore, as reported in the 2015-16 annual report. The information that Panaya was the flashpoint came from four independent sources.
“There is nothing there. He was CFO at the time we went through the process. It was the first time we were doing it, so we were extra careful,” said Sikka. “My view is that too big a deal has been made out of Rajiv Bansal’s severance, David’s (Kennedy) severance, my compensation and Punita’s (Kumar-Sinha) appointment.”
On the same question, Infosys non-executive chairman R Seshasayee added: “In any organisation you would have dissenting voices. It is a good thing.”
The measures outlined at the press conference by the Infosys chairman were contested by former chief financial officer V Balakrishnan, who said, “His (Rajiv Bansal’s) service was not terminated but he resigned on his own according to the company press release, and he even served his notice period of three months. Then where is the question of severance pay?” Balakrishnan added that Seshasayee’s “clarification raises more questions”.
Murthy struck a positive note in his assessment of the intentions of the company’s board. “They are all goodintentioned people of high integrity, but obviously being human even good people sometimes make mistakes, this is one such case,” said Murthy.
“But good leadership demands that they listen to all concerned shareholders, re-evaluate their decision and take corrective action. I hope they take corrective action soon and improve governance for a better future for the company,” he said. The software giant employs about 2 lakh technology workers, and is dependent on the US, Europe and the rest of the world for about 97% of its revenues, and has 18-plus clients who contribute more than $100 million in revenue.
In an interview to ET published in its Friday edition, Murthy demanded a review of the role played by the special committee on senior management compensation and severance pay, as well as the board of the company with regard to high severance payouts. “Such payments raise doubts whether the company is using such payments as hush money to hide something,” he had said in the interview.
The 2015-16 Infosys annual report showed that Infosys was to pay .₹ 17.38 crore to then CFO Rajiv Bansal, who quit in October 2015, but continued to serve as an adviser to the CEO and the board until December. Infosys subsequently explained the payment as part of an enhanced non-compete.
In an interview to ET published in its Monday edition, Seshasayee said the amount actually paid was .₹ 5.2 crore and that “balance payments have been suspended since April 2016”.
Former Infoscion Balakrishnan is of the view that other governance issues have come to the fore because of this issue (of the severance payout to Rajiv Bansal). “If investigations have proved there was nothing wrong, then why stop?” he said. “Someone has to own this up. The chairman should take responsibility,” he added. Murthy had demanded that the Infosys board be recast with “some good people” like Marti Subrahmanyam and that it should also induct unnamed former Infoscions, “schooled in the Infosys values”.
“Institutional investors have access to board and the CEO. Normally they don’t go to the public and keep conversations direct,” said Kavil Ramachandran, executive director of ISBHyderabad’s Centre for Family Enterprise, adding that institutional shareholders have much more at stake than founders whose collective stake is just over 12%.
TV Mahalingam & Megha Mandavia